Marlborough Region Quarterly economic monitor - June 2020

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Total dairy payout

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Highlights for Marlborough Region

  • Marlborough Region's total dairy payout for the 2018/19 season is estimated to have been approximately $42.1m.
  • Marlborough Region's dairy payout for the 2019/20 season is expected to be approximately $48.4m, $6.25m higher than last season, assuming that production levels from last season are maintained.
  • The total dairy payout for New Zealand is estimated to have been approximately $11,964m in the 2018/19 season, and is expected to be $1,773m higher in the 2019/20 season.

National overview

Near-term expectations for the dairy sector are holding up, with global demand still present for New Zealand’s (now again) largest export. As expected, the dairy pay-out has settled towards the lower end of previous expectations, with Fonterra’s pay-out for the season just finished sitting at $7.15/kgms. The drought has hurt farmers in the North Island, with higher feed costs and other issues biting. Considerable uncertainty remains around the dairy outlook, with Fonterra’s opening pay-out for the current season ranging between $5.90-$6.90/kgms – with a mid-point of $6.40/kgms – reflecting expected issues. Dairy exports were up 13%pa in the June 2020 quarter, highlighting the current resilience in primary sector activity.